Beef slaughtering plants are hoping that many non-EU markets will reopen for Irish beef "when things settle down" in the aftermath of the latest BSE crisis, according to the Irish Meat Association (IMA).
About £1 billion (€1.27 billion) is said to have been wiped off the value of Irish cattle stocks value in the past six weeks.
An Bord Bia concedes that the pace of this process will be determined by how quickly consumer confidence can be restored in key markets. The Irish Farmers' Association warns of a poor New Year outlook for members already operating on low margins.
According to IMA chief executive, Mr John Smith, the EU or the Government will have to compensate beef factories for up to £100 million worth of steer and cow beef on hand or being returned from markets abroad. As of January 1st - when BSE testing becomes mandatory - these stocks are valueless because the carcasses will be from animals aged more than 30 months that have not been tested.
"The cost to the National Exchequer of an animal that goes the destruction route is £300. If one million cattle went for destruction in Ireland, the National Exchequer would be carrying a cost of £300 million," Mr Smith said.
"We think the better course is that we would try to put them into the commercial market. Of course, price is going to affect the way they go."
Meat factories do not favour having dedicated factories for the destruction scheme because of fears that some factories would suffer financially as a result. "Every meat factory in the country should be allowed to allocate particular days of its activity to the destruction programme. There is no reason why you can't do a destruction programme on day one, hose down the place and disinfect and revert to commercial production the following day. They're running them both in the same plant in the UK," he said.
Mr Michael Duffy, chief executive of Bord Bia, believes the pace of recovery of European markets for Irish produce will be dictated by the level of consumer confidence that can be restored. It took two-and-a-half years for Irish beef exporters to recover their markets in Europe after the 1996 British BSE crisis, he says. International markets recovered fairly quickly. However, there is the added complication now that BSE is a pan-European problem.
Half of Irish beef is exported to Europe, where in the three biggest markets - France, Italy and Germany - consumption has fallen by between 40 and 50 per cent. "This has had a dramatic effect on the Irish trade and an increased focus on imported products coming in to those countries. What we would expect to see over the next year is an increased level of nationalisation, where consumers want beef produced in their own countries," he said.
The other half of our exports go to non-EU countries, mainly Egypt, the Gulf states and, sometimes, Russia. "In terms of priority, we have to make sure confidence-boosting measures are acted upon, that there is an information campaign to let consumers know what the facts are and the third step is promotion. A lot of hard work is going to be needed. Everybody recognises the importance of international markets."
Mr Derek Deane, chairman of the Irish Farmers' Association's beef committee, said: "I believe the problem will be with us for a long while and we need to be able to test logically, progressively and scientifically. The outlook is very poor for farmers in the short term because they would be people working on a very low margin anyway."
